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Internet and software giants Google and Microsoft have slammed legislation that could see the Government try to force them to make their systems available for interception by the Government Communications Security Bureau (GCSB).

Only network operators such as Telecom, Vodafone and 2degrees are obliged to make their networks available for eavesdropping by the GCSB, SIS and police.

The new Telecommunications (Interception Capability and Security) bill being considered by Parliament's law and order committee would allow the Government to place the same obligations on internet service companies such as Google, Facebook and Microsoft-owned Skype.

Google submitted that the bill would harm innovation to the detriment of New Zealand customers and would raise privacy issues.

While Google recognised interception tools were necessary, it was concerned the new obligations were broader than necessary.

The additional costs, time and challenges imposed "may discourage both local and international entities from making new service offerings in New Zealand. It could also lead to existing providers exiting the New Zealand market or reducing their offerings", Google submitted.

Google also warned that the bill would require global internet companies based outside New Zealand to undertake interception, "even if doing so would conflict with those companies' legal obligations in their home jurisdiction".

It said ministers should only be able to impose interception obligations on internet service companies "following the transparency of a parliamentary process" rather than a simple ministerial direction which the bill allows for. That ministerial direction and other processes under the bill lacked transparency and "would likely raise public fears of unjustified intrusion into their privacy", Google said.

Microsoft also said the bill could result in obligations being placed on overseas-based internet companies that may "conflict with pre-existing obligations that they have under overseas laws".

The committee's consideration of submissions continues this week while the security and intelligence committee is to hear submissions on the GCSB bill from tomorrow.